What is the difference between a balance sheet and a trial balance? Mark one answer:
(A)A trial balance does not show profit, a balance sheet does.
(B)A trial balance is used at month end and a balance sheet at year end.
(C)A trial balance is used to determine profit, a balance sheet to determine net assets.
(D)A trial balance is used to close accounts, a balance sheet to open accounts.
(E)A trial balance is an internal document, a balance sheet is an external document.
If Jenny's Bakery purchased an insurance policy, assuming the accrual accounting method is still being used, when would the company report the cost of the policy as an expense?
(A)When Jenny signs the policy (B)When payment is made (C)When the bakery receives the benefits of the policy (D)When the bakery receives payments from the insurance company (E)When the invoice is received
Correct Answer: C
Common stock has a _____ balance and is a/an _____ to the Corporation.
(A)debit; liability (B)credit; liability (C)debit; asset (D)credit; asset (E)credit; equity
Correct Answer: B
The General Fund pays an invoice for telecommunications that includes charges owed by the Water Utility Enterprise Fund. The Enterprise Fund subsequently remits its share of the telecommunications charges to the General Fund. The General Fund records the amount received from the Enterprise Fund as:
(A)An increase to revenue. (B)An increase to Operating Transfers In. (C)A decrease in expenses. (D)A decrease in Expenditures.
Correct Answer: D
More CPA Exam Questions
- 1A static budget contains which of the following amounts?
- 2What is the difference between a balance sheet and a trial balance? Mark one answer:
- 3Which one of the following would constitute a highly inflationary economy when determining the functional currency of a foreign entity?
- 4One purpose of GAAP is to provide _____ between accounting periods.
- 5Bart’s Brewskies has grown beyond its wildest dreams. They are now a corporation and have hired an accountant. Their income statement is now showing a net income. How is this income shown on the Statement of Retained Earnings? (I) It increases retained earnings.(I). It is shown as dividends paid to shareholders.(I)I. It does not impact the Statement of Retained Earnings. Mark one answer: